Roth starts coverage of 3 companies with novel approaches to AD

Roth Capital Partners initiated coverage of three companies – vtv Therapeutics (NASDAQ:VTVT), Anevex Life Sciences (NASDAQ:AVXL) and Neurotrope Biosciences (NASDAQ:NTRP) – that are developing drugs with novel approaches to Alzheimer’s disease (AD).

Analyst Robert LeBoyer writes that each company is developing drugs based on early control points in the pathways that lead to symptoms. “These could potentially be disease-modifying therapies for Alzheimer’s disease.”

The only approved drugs for AD can reduce symptoms for a short period, but have no impact on progression of the disease. Since the early 1990s, most product development has been directed at the two lesions known as amyloid beta and neurofibrillary tangles that are used to confirm a diagnosis at autopsy.

The majority of product development strategies to stop or slow the disease have been targeted at removing amyloid beta or preventing it from forming. Dozens of products have been tested, but none have shown sufficient efficacy in late-stage clinical trials.

Mr. LeBoyer said the results from these trials have made investors pessimistic on the entire field of Alzheimer’s drug development. “In our view, the assumption of failure provides an opportunity for investors to find companies where the product valuation has an unusually high discount rate,” he added.

Products being pursued by vtv, Anavex and Neurotrope target early control points in the pathways of disease rather acting directly on the late-stage lesions, he pointed out. “We believe that clinical success in the Alzheimer’s disease field could improve perception for all of them.”

Mr. LeBoyer said vtv Therapeutics is due to report first data from its Phase 3 trial in mild AD with Azeliragon, an antagonist to the RAGE receptor. This prevents RAGE transport of amyloid beta and blocks its signals for pathologic cellular responses, continued formation of amyloid beta and phosphorylation of tau.

Azeliragon is in a two-part Phase 3 trial, known as STEADFAST, with data announcements expected in April 2018 and in early 2019. Mr. LeBoyer rates vtv at “buy” with a $17 price target. The stock closed at $6.46 on March 8.

Anevex is developing ANAVEX 2-73 as an agonist to the Sigma-1 receptor, which is an intracellular modulator that has additional roles in ion regulation, gene transcription and nerve cell survival, Mr. LeBoyer said.

The company has reported data from a Phase 2a trial, with a Phase 2b/3 trial expected to begin by the end of 2018. He rates the stock at “buy” with a price target of $6. It closed at $3.07 on March 8.

Neurotrope is developing Bryostatin-1, an activator of an early regulatory factor called Protein Kinase C epsilon. Mr. LeBoyer said this is a control point for several processes required for sprouting new nerve branches, an essential step for formation of new memories.

In addition, Protein Kinase C epsilon regulates other processes that can lead to the disease pathways and downstream lesions in AD, he added. The company is planning to start a Phase 2 trial to confirm and further characterize the findings of its first clinical trial, reported in 2017.

Mr. LeBoyer rates Neurotrope at “buy” with a price target of $15. The stock closed at $9 on March 8.

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